Obama May Appoint Auto Industry Czar

Posted: Nov 12, 2008 10:51 a.m.

The troubles of the ailing auto industry are quickly becoming a major focus for President-Elect Barack Obama's young administration. As Congress and President Bush debate an industry bailout, sources indicate that Obama may favor creating a White House office, headed by an "auto industry czar," to oversee reforming the troubled American auto industry.

The Detroit News reports that both "Bush and Obama are signaling they may favor appointment of an auto czar to oversee the government's efforts to funnel emergency assistance to automakers." Congressional leaders and members of both the outgoing and incoming administrations have all said that automakers might receive federal aid only on certain dictions, including efforts "to further improve fuel efficiency and show that they have a plan to return to profitability. Automakers could also be required to give the government preferred stock in the companies and accept government representatives as board members. As in the 1979-80 Chrysler bailout, workers may have to make wage concessions."

The press was unable to get direct confirmation of the plan yesterday. John Podesta, the former Clinton administration official heading Obama's transition team, told the Washington Post "When we have an announcement about that, we'll raise it."

But some analysts like the idea. Seeking Alpha says the new President should "give restructuring authority to one individual, similar to the power that former Goldman Sachs CEO Hank Paulson has had with the financials. This position must be filled by an individual who would be well respected by the other CEOs, someone who knows the auto industry but won't be bogged down by its mediocre past, and someone who understands the art of the turnaround. As a pre-condition to receiving survival funding, the automakers and the unions must be forced to concede their restructuring rights to this new automotive czar. He can then act in the best interest for the industry rather than tripping over the individual self interests of turf protection that have caused this out-dated model."

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The GMC truck division should not continue as a part of GM. GM and the US government have one chance to get the reinvention of the new GM right and avoid continued government and taxpayer support.
Domestic and import full-size truck and SUV sales are declining with fuel economy concerns, so manufacturing two of the same brand is not a profitable long-term business model. Chevrolet and GMC trucks and SUVs are essentially the same vehicles. Chevrolet models cost less, have equal or better quality and fuel economy, and outsell GMC models more than three to one. Toyota and other imports don't manufacture two of the same full-size vehicles under different brand names; it does not make sense, economically, for GM to continue producing both GMC and Chevrolet.
Advocates who hope to keep GMC as the auto industry changes to more fuel-efficient models want to continue a business strategy that will ultimately be as unprofitable as the now defunct brands of Hummer, Pontiac, Oldsmobile, Saturn, and Saab.
Follow the import business model, eliminate GMC now, and save the costs associated with the extra GMC manufacturing processes and distribution channels, which will not be part of a long-term solution. The new GM will be more profitable going forward without GMC if Chevrolet produces and sells all of GM's full-size trucks and SUVs.
GM won't need government and taxpayer support again if GMC is eliminated now.

The bailout money taken from the taxpayers shouldn't be used to prop up companies that imploded because of their gross negligence. It should be given back to its rightful owners. As far as the money that was printed for this occasion : BURN IT!!!!!!!